Correlation Between SunLink Health and Valvoline
Can any of the company-specific risk be diversified away by investing in both SunLink Health and Valvoline at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SunLink Health and Valvoline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunLink Health Systems and Valvoline, you can compare the effects of market volatilities on SunLink Health and Valvoline and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SunLink Health with a short position of Valvoline. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Valvoline.
Diversification Opportunities for SunLink Health and Valvoline
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SunLink and Valvoline is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Valvoline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valvoline and SunLink Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SunLink Health Systems are associated (or correlated) with Valvoline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valvoline has no effect on the direction of SunLink Health i.e., SunLink Health and Valvoline go up and down completely randomly.
Pair Corralation between SunLink Health and Valvoline
Considering the 90-day investment horizon SunLink Health Systems is expected to generate 1.93 times more return on investment than Valvoline. However, SunLink Health is 1.93 times more volatile than Valvoline. It trades about 0.09 of its potential returns per unit of risk. Valvoline is currently generating about -0.01 per unit of risk. If you would invest 80.00 in SunLink Health Systems on September 1, 2024 and sell it today you would earn a total of 6.00 from holding SunLink Health Systems or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. Valvoline
Performance |
| Timeline |
| SunLink Health Systems |
| Valvoline |
SunLink Health and Valvoline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and Valvoline
The main advantage of trading using opposite SunLink Health and Valvoline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Valvoline can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Valvoline will offset losses from the drop in Valvoline's long position.| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
| Valvoline vs. Cosan SA ADR | Valvoline vs. Delek Energy | Valvoline vs. Crossamerica Partners LP | Valvoline vs. Par Pacific Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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